ASSESSING THE IMPACT OF FISCAL AND MONETARY POLICIES ON THE FINANCIAL PERFORMANCE OF UNIVERSAL BANKS IN GHANA AND ITS EFFECT ON THE ECONOMY. USING ECOBANK GHANA LTD AS A CASE STUDY

The triangulation of the mixed-method survey study assessed the impact of fiscal and monetary policies on the financial performance of universal banks in Ghana and their effect on the economy, using Ecobank Ghana as a case study. The effective and efficient implementation of fiscal and monetary policy tools has become a critical challenge facing the nation’s economy in influencing the macroeconomic variables and the inefficient operation of the banking industry. The study adopted a concurrent, deductive, explanatory, and case study strategy based on a cross-sectional study using primary sources of questionnaire and secondary sources of document analysis. The response rate was 75% for 61 questionnaires and 5 interviews. Using the SPSS software, the data was statistically analysed using thematic, descriptive, and inferential statistical analyses. The analysis of inferential statistics results by the use of the correlation matrix indicates that government spending, taxation, inflation rate, and earnings quality positively and statistically significantly correlated to ROA and ROE. At a 95% confidence level, management operational efficiency negatively and statistically significantly correlated to ROA and ROE. However, GDP growth and liquidity measurement were negatively correlated to ROA and ROE but statistically nonsignificant. The adjusted R square of fiscal policy tools and the internal control factors of 42.1%, 38.3%, and 87.0%, 68.1% correlated positively and significantly to ROA and ROE, respectively. Further study may be required to compare different banks’ results through another methodology to capture the impact of the independent variables on the bank’s profitability.